Mr. and Mrs. Cairn were overjoyed to learn of their pregnancy with their second child. But when the delivery happened and the baby was brought home from the hospital, the neighborhood reception was less than joyful. As condo owners at Grosse Pointe Estate Condominiums in Michigan, the Cairns enjoyed the property and safety of the premise. However, the by-laws stated that their particular unit – a three bedroom unit with two levels – could only house 3 residents. And baby made 4.
The lawsuit alleges that the neighbors repeatedly asked them what the couple was going to do for housing, insinuating that they had to move. The lawsuit further states that the association board members approached the family and explained that they were now in violation of association rules and had to move. The Cairns even state that the property management company confirmed that the association rules said they were now obligated to sell their unit.
The couple did sell, but then sued. They based their lawsuit on the board’s violation of the Fair Housing Act which prohibits discrimination based on familial status. They also cited additional laws that ban the restriction on number of occupants in various housing situations.
The matter even got the attention of Elizabeth Stoddard who is a director in the East Michigan Fair Housing Center. She explained that fair housing violations is “one of the largest issues we’re trying to address.”
While most people would find these actions surprising and unbelievable, many do not realize they are also against federal law. Fair housing laws regulate how housing can be used and restricted – or NOT restricted. Gender, age, familial status, disability, and many other classes are protected under this law.
It is important for condo associations to realize the risks and liability they face for their actions. It is also important to stay on top of laws that impact their association and how to best protect the association from lawsuits, missteps and errors.
An actual violation of fair housing laws are typically uninsurable but the defense of such allegations can be. Because not all insurance policies are written the same, it is important to check with an experienced broker what coverage your association may have. If it is discovered that your condo association Director’s & Officer’s insurance policy does not provide any protection for this, it may be time to switch policies.
Contact us for a free consultation and policy review on your condo association’s insurance program.